The calm settling over the world’s $7.5-trillion-a-day foreign exchange market is unsettling some money managers. With volatility dwindling to its lowest level this year, currency traders told us some market-makers who rely on strong price swings are having a harder time making a profit. Advances in technology — from algorithms to automation — are credited with blunting FX-market price spikes, even as monetary pressures mount across many economies.
Billionaire investor Ray Dalio warned money managers shouldn’t be sanguine in this new environment. He suggested all currencies will have trouble maintaining their roles as repositories of wealth as investors turn to alternative assets to store value. During the FutureChina Global Forum in Singapore, Dalio warned runaway US spending is putting the world monetary order at risk.